Debunking the Myths of How Millennials Save for Retirement

By Retirement FOXBusiness

Challenging the assumptions about Millennials

State Street Head of Defined Contribution Fredrik Axsater on how Millennials view savings and retirement.

A new survey challenges the assumptions of America’s Millennials and how they save for retirement. 

Continue Reading Below

“First of all, Millennials are just so important, from a retirement and a savings perspective… all they know really is DC (defined contribution) plans like 401(K)s, and that means that they own the outcomes, so we have to get it right, we have to help them make retirement work and that is why we dedicated this survey to them,” Fredrik Axsater, State Street Head of Defined Contribution explained to the FOX Business Network’s Maria Bartiromo. 

Axsater addressed a couple of myths they discovered in the survey, one of which is that all Millennials just want an app to use to access their retirement portfolios. 

“The truth is that they want the app and they want to chat.  More so than other age cohorts, Millennials are looking for new technology, they like that, but at the same time they also want an in-person conversation each year.  And I think what they are really saying is they want engagement.” 

Another myth Axsater dispelled is that most people are over the financial crisis. 

“It’s just not true, fifty-four percent of Millennials are saying that the financial crisis is something that they take into account in every financial and investment decision they make.”  

Continue Reading Below

Axsater continued, “You may also say ‘well, why is this, they didn’t even live through that?’ but they did through their parents.  We asked some specific questions around risk aversion and we find that expected returns for them is similar across asset classes.  So they expect about the same return for equities as they do for cash, which seems kind of unattractive.”